Pam Fredrick, right, of John L. Scott Real Estate, talks about the attributes of a Liberty Lake waterfront home to Maria Hatcher on April 22. Hatcher’s husband works in real estate with Fredrick. The house has an asking price of $1.375 million.(Full-size photo)(All photos)

In 2002, there were four North Idaho homes listed for sale at more than $1 million. Just two sold.

But it was a start.

By mid-decade, there were dozens of listings, said Coldwell Banker Schneidmiller Realtor Joel Elgee.

Major magazines like Outside, Sunset, Forbes and Smart Money were praising Sandpoint and Coeur d’Alene as recreational, retirement and investment meccas.

Former Denver-area car dealer Marshall Chesrown returned to Coeur d’Alene and developed The Club at Black Rock, a golf enclave where lots started at $200,000. It was the first of several exclusive projects Chesrown and others undertook in the heat of the greatest real estate bubble in many decades.

Now, the listings are still there, but buyers are scarce.

There were 199 homes listed on the Coeur d’Alene Multiple Listing Service last week at prices from $1 million to $17.5 million. At last year’s sales rate – 33 of the $1 million-plus listings sold – that’s a six-year supply.

By comparison, the March inventory of all unsold homes in Spokane County represented about 10 months of sales. But as in North Idaho, Spokane County’s much smaller supply of $1 million homes will take some years to work off.

Elgee said an imbalance between supply and demand for pricey homes is not unusual.

“We’re always going to have an oversupply just because the pool of buyers is so small,” he said.

North Idaho is by no means unique. In foreclosure-ridden Las Vegas, the inventory of listings $3 million and up is six years.

Dave Emery has shopped both markets.

The retiree and his wife are looking for a nest after three years of cruising on their yacht. The values in Las Vegas are dazzling, Emery said, but so many homes are in foreclosure or subject to a short sale there’s a risk of buying a home only to see surrounding properties deteriorate.

“You have to be on the lookout for that,” said Emery last week during a second round of viewing Coeur d’Alene-area homes. He said the couple like four seasons, wildlife and the community but are bidding cautiously.

“Real estate values are changing,” he said. “Not all people realize they are changing.

“It’s a new business.”

The Emerys are looking for a home in the $850,000 to $1.5 million range, he said. They made an offer on one home, and though the owner made a substantial concession on price, they chose to keep looking.

“We like what we see up here,” said Emery.

Elgee said North Idaho properties are often second or third homes for affluent owners typically more sophisticated about real estate than average homeowners. They have the means to ride out a bad market or enough money to absorb a loss, he said.

For example, the most expensive home listed in North Idaho is a 15-acre estate owned by Coeur d’Alene Resort owner Duane Hagadone. First listed for $27.5 million, the home is on the market for $17.5 million.

No. 2 on the list: the Post Falls mansion of Ron and Georgia Lee Puryear, who made their fortune as Amway distributors, marked down to $16,995,000 from $20 million.

Elgee said mansion owners, like all homeowners, like to benchmark their property’s value at what it might have fetched – or what they paid – a few years ago. Realtors have to talk down their expectations, starting with a review of comparable sales, he said.

“I let the statistics speak for themselves,” Elgee said.

Jeff Bond, owner of the Sotheby’s International Realty franchises in Sandpoint and Coeur d’Alene, is one of those statistics.

Bond and his wife, Cindy, own a home in Hope, across Lake Pend Oreille from Sandpoint. They are selling it because they want to eliminate the long commute to Coeur d’Alene. First listed at $4.8 million, they have slashed the price four times, down to $2.9 million.

They want to buy a home closer to Coeur d’Alene, but won’t until the Hope property sells, Bond said.

“Just because I’m a Realtor doesn’t mean I’m immune,” Bond said. “You sell because you want to move on with your life.”

One client recently accepted a $2.5 million offer on a home purchased just two years ago for $4 million, he noted.

Bond said a few owners are walking away from homes because they no longer want to make mortgage payments, but foreclosures and short sales weigh more heavily on the market.

Until the banks clear the foreclosures off their books – probably not until well into 2012 – the market will not stabilize, he said.

In the meantime, values have become so attractive that foreign buyers are starting to sniff around, Bond said, noting a German investor was in Sandpoint last week.

“If you’re a knowledgeable buyer, and you know deals are out there, you go and look for them,” he said.

One lucky buyer early this year capitalized on the woes of a contractor unable to sell a $2.3 million house built four years ago in the Legacy Ridge development in Liberty Lake.

Realtor Pam Fredrick said private investors in the home first took it over. Then in January, after almost 800 days on the market, the home sold for $969,000.

Homes listed at $1 million and up are relatively scarce in Spokane County. Spokane Association of Realtors President Rob Higgins said 24 such homes on less than 10 acres were for sale last week.

Fredrick, of John L. Scott Realty, said six sold in both 2009 and 2010, with the sales evenly split between Liberty Lake and Spokane’s South Hill.

She has sold two $1 million-plus homes in the last 14 months, both on the Liberty Lake waterfront. Both buyers were locals who were trading up, she said.

Fredrick said a few buyers were moving into Spokane County from Kootenai County because of Idaho’s income tax. For example, she said she knows of two doctors who paid more than they would have for comparable homes in Idaho because of the tax difference, adding that Liberty Lake’s “community feel” promoted by Greenstone Homes has also been a selling point.

She said expensive properties are typically on and off the market as sellers grudgingly lower their expectations to adjust for the market.

Although rates on jumbo loans – $417,000 and up – have tumbled to about 5.5 percent from 8 percent, Fredrick said banks may look for as much as $500,000 in buyer cash before they will make a loan for the balance.

She said some owners have been willing to carry contracts on their homes in order to make a sale.

Despite his own challenges, and concerns about bank misbehavior, Bond said he is optimistic about the long-term prospects for high-end home sales. Although sales may be down by half from their peak, the market has come a long way since he started in the business 20-plus years ago, he said.